King v. Comppartners, Inc.

• Decision Date: 23 August 2018
• Docket Number: S232197
• Court: United States State Supreme Court (California)
• Parties: KIRK KING et al., Plaintiffs and Appellants, v. COMPPARTNERS, INC., et al., Defendants and Respondents.

KIRK KING et al., Plaintiffs and Appellants, v. COMPPARTNERS, INC., et al., Defendants and Respondents.

S232197

SUPREME COURT OF CALIFORNIA

August 23, 2018

Ct.App. 4/2 E063527

Riverside County Super. Ct. No. RIC 1409797

By statute, California's workers' compensation system provides an injured employee's "exclusive" remedy against an employer for compensable work-related injuries. (Lab. Code, § 3602, subd. (a).) Here we consider the application of workers' compensation exclusivity to claims arising from the workers' compensation utilization review process. Through that process, utilization reviewers, acting on behalf of employers, determine whether the plan recommended for the treatment of an employee's industrial injury is medically necessary after consulting a schedule of uniform treatment guidelines. If the utilization reviewer concludes that a recommended treatment is not medically necessary, he or she may modify or deny the treatment request. (Lab. Code, § 4610.)

In this case, a utilization reviewer denied a treating physician's request to continue prescribing certain medication for an injured employee. Alleging that the utilization reviewer caused him additional injuries by denying the request without authorizing a weaning regimen or warning him of the possible side effects of abruptly ceasing the medication, the employee filed a lawsuit seeking recovery in tort. We conclude that the workers' compensation law provides the exclusive remedy for the employee's injuries and thus preempts the employee's tort claims.

I.

A.

First created more than a century ago, California's workers' compensation system is now governed by the Workers' Compensation Act (WCA), "a comprehensive statutory scheme governing compensation given to California employees for injuries incurred in the course and scope of their employment." (Charles J. Vacanti, M.D., Inc. v. State Comp. Ins. Fund (2001) 24 Cal.4th 800, 810 (Vacanti); see Mathews v. Workmen's Comp. Appeals Bd. (1972) 6 Cal.3d 719, 729-731; Lab. Code, §§ 3200 et seq.) At the core of the WCA is what we have called the " ' "compensation bargain." ' " (Vacanti, supra, at p. 811.) Under this bargain, " 'the employer assumes liability for industrial personal injury or death without regard to fault in exchange for limitations on the amount of that liability.' " (Ibid.) The employee, for his or her part, " 'is afforded relatively swift and certain payment of benefits to cure or relieve the effects of industrial injury without having to prove fault but, in exchange, gives up the wider range of damages potentially available in tort.' " (Ibid.)

Under the WCA, an employer must provide an injured worker with all medical treatment reasonably required to cure or relieve the effects of his or her injury. (Lab. Code, § 4600.) When an injured employee suffers an industrial injury, the employee reports the injury to his or her employer and then seeks medical care from a treating physician. After examining the worker, "the treating physician recommends any medical treatment he or she believes is necessary andthe employer is given a treatment request to approve or deny." (State Comp. Ins. Fund v. Workers' Comp. Appeals Bd. (2008) 44 Cal.4th 230, 238 (State Fund).)

For many years, if an employer wished to challenge a treating physician's recommendation, it had to invoke a "cumbersome, lengthy, and potentially costly" dispute resolution process involving review by qualified medical evaluators, litigation before a workers' compensation judge, and a right of appeal to the Workers' Compensation Appeals Board. (State Fund, supra, 44 Cal.4th at p. 238; see id. at p. 239.) To increase efficiency and reduce costs, the Legislature enacted several major reforms that took effect in 2004. These reforms included a process of mandatory utilization review, under which a reviewer assesses a treating physician's recommendation according to a schedule that establishes uniform guidelines for evaluating treatment requests. (Lab. Code, § 4610; see State Fund, at p. 240; see also Smith v. Workers' Comp. Appeals Bd. (2009) 46 Cal.4th 272, 279.)¹

Under the statute as amended, every employer is required to establish a utilization review process, "either directly or through its insurer or an entity with which an employer or insurer contracts for these services." (Lab. Code, § 4610, former subd. (b), now subd. (g).) The utilization review process is "comprehensive," covering "any and all" treatment requests. (State Fund, supra, 44 Cal.4th at pp. 236, 243.) "If the treatment request is straightforward anduncontroversial, the employer can quickly approve the request—utilization review is completed without any need for additional medical review of the request." (Id. at p. 241; see id. at p. 240.) But while an employer can unilaterally approve a treatment request, only a licensed physician competent to evaluate the "specific clinical issues" can modify, delay, or deny a treatment request. (Lab. Code, § 4610, former subd. (e), now subd. (g)(3)(A).) The central issue for the utilization reviewer is whether the requested treatment is medically necessary. (Id., § 4610, subd. (a).) This medical necessity determination is to be made after consulting the schedule for medical treatment utilization (id., § 4610, former subds. (c), (f), now subds. (g)(1), (h)), which is presumed to be "correct on the issue of extent and scope of medical treatment" (id., § 4604.5, subd. (a); see ibid. [explaining that the presumption can be rebutted]).

Labor Code section 4610 specifies the information on which utilization reviewers are to rely in making medical necessity determinations (Lab. Code, § 4610, former subd. (d)), as well as the timing of the determinations (id., § 4610, former subd. (g)) and the nature of the explanations that must accompany the determinations (id., § 4610, former subd. (g)(4)). When, for example, a utilization reviewer decides to deny the recommendation of a treating physician in the midst of treatment, that determination must be communicated to the requesting physician within 24 hours of the decision. (Id., § 4610, former subd. (g)(3)(A), now subd. (i)(4)(A).) In these so-called concurrent review cases, the statute provides that "medical care shall not be discontinued until the employee's physician has been notified of the decision and a care plan has been agreed upon by the physician that is appropriate for the medical needs of the employee." (Id., § 4610, former subd. (g)(3)(B), now subd. (i)(4)(C).) The decision to deny the request must "include a clear and concise explanation of the reasons for the employer's decision, a description of the criteria or guidelines used, and the clinical reasons for thedecisions regarding medical necessity." (Id., § 4610, former subd. (g)(4), now subd. (i)(5).)

About a decade after it first instituted mandatory utilization review, the Legislature enacted a second set of reforms designed to streamline the resolution of disputes concerning utilization review determinations. (Stats. 2012, ch. 363, § 1, pp. 3719-3720.) The Legislature found that the then-existing dispute resolution system was "costly, time consuming, and [did] not uniformly result in the provision of treatment that adhere[d] to the highest standards of evidence-based medicine," all of which "adversely affect[ed] the health and safety of workers injured in the course of employment." (Id., § 1, subd. (d), p. 3719.) To remedy these ills, the Legislature crafted a system of "independent medical review," or "IMR," for resolving utilization review disputes. (Lab. Code, § 4610.5, subd. (d).)

Following this second set of amendments, the IMR process is the exclusive mechanism for review of a utilization review decision. (Lab. Code, § 4610.5, subd. (e); see also id., § 4062, subd. (b) ["If the employee objects to a decision made pursuant to Section 4610 to modify, delay, or deny a request for authorization of a medical treatment recommendation made by a treating physician, the objection shall be resolved only in accordance with the independent medical review process established in Section 4610.5."].) Independent medical review "is performed by an independent review organization, which assigns medical professionals to review pertinent medical records, provider reports, and other information submitted to the organization or requested from the parties." (Stevens v. Workers' Comp. Appeals Bd. (2015) 241 Cal.App.4th 1074, 1090; see generally Lab. Code, § 4610.6.) The independent reviewer is tasked with determining whether the requested treatment is "medically necessary based on the specific medical needs of the employee and the standards of medical necessity asdefined in subdivision (c) of Section 4610.5." (Id., § 4610.6, subd. (c).) If an employee disputes an adverse decision on independent medical review, he or she may appeal that decision to the Workers' Compensation Appeals Board (id., § 4610.6, subd. (h)); decisions of the Board may in turn be appealed to a Court of Appeal (id., § 5950). (See Stevens, supra, 241 Cal.App.4th at p. 1091.)

B.

In February 2008, plaintiff Kirk King sustained a back injury while he was at work.² King suffered chronic pain as a result of the injury, which in turn caused him anxiety and depression. In July 2011, a mental health professional prescribed several psychotropic drugs, including Klonopin, to treat these latter conditions.

Defendant Dr. Naresh Sharma is an anesthesiologist who was employed by defendant CompPartners, Inc. (CompPartners), a licensed workers' compensation utilization review management company. In July 2013, Dr. Sharma conducted a utilization review of King's Klonopin prescription. Dr. Sharma determined that the Klonopin was medically unnecessary and decertified the prescription. Dr. Sharma's decertification did not provide for a weaning regimen, nor did Dr. Sharma warn King of the risks of abruptly ceasing Klonopin. King immediately stopped taking the medication and suffered a series of four...